Amazon, the infamous online retailer, is finally embarking on building physical stores with the aim of dominating the grocery industry.
Why Are Brick And Mortar Stores Elusive For Amazon?
But before Amazon can embark in the traditional food retail business, the company has experienced a few problems. First, the company has inflexible policies when it comes to selling food items. Unlike conventional grocery stores, they cannot mark down products that are nearing their expiration dates. Instead, they throw these products out. Second, they also have poorly-trained staff and quality inspectors that do not understand quality when it comes to the food that they are selling. This is the main reason why they have complaints especially when they ship fresh food items to customers.
According to Kurt Jetta, CEO of the consumer product firm TABS analytics, online grocery is something that e-commerce companies have yet to master. Moreover, only a small portion of online buyers shop for food items with only 4.5% of all online shoppers buying food. Another problem is that while online stores guarantee convenience, consumers love doing their grocery shopping the traditional way.
Amazon Planning To Build The Biggest Brick And Mortar Grocery Store
With this knowledge, Amazon CEO Jeff Bezos realizes that the company cannot succeed with their online grocery alone, so they are planning to build the biggest brick-and-mortar store in the world. The physical store will be located in Seattle. The company is planning to build three stores.
The company aims to provide traditional experiences to its shoppers so they can check out their products with their senses. While Amazon wants to deliver a great shopping experience to their consumers, they have also incorporated innovative technology that makes them different from other brick-and-mortar stores. Currently, they are testing the idea of mixing in-store and online shopping by creating the concept of Amazon Go where people can shop and pay for items automatically without the need to visit the check-out counter. They are also testing the idea of creating robot-run supermarkets thus there is a need for fewer people to operate the store.
With these innovations, Amazon is aiming to be one of the top grocery retail companies by the year 2025. This means that they have to make more than $30 billion concerning their annual sales of food and beverage starting this year. To be able to achieve this, they will need to launch more stores and warehouses all over the country.
A stronger grocery business could land Amazon in a position as the biggest wholesale food distributor in the world. But before this can even come to fruition, the company must overcome many things, and this includes finding ways to convince people to shop at Amazon whenever they are thinking of restocking their fridge and pantries.
Inspired by www.bloomberg.com